Political leaders and finance officials faced renewed pressure to come up with a bolder rescue plan, with the European Central Bank urged to play a bigger role in preventing further damage to the global economy.

Germany and senior officials within the ECB itself are wary about it being drawn more deeply into supporting Greece and other cash-strapped states.

But, as world stock markets plunged amid fears the crisis could spread, the International Monetary Fund said the ECB was key to solving the crisis.

âIt is the only agent that can really scare the markets,â said Antonio Borges, head of the IMFâs European department.

He added it was essential to combine the ECBâs potential crisis-fighting power with Europeâs Â£380billion bailout fund to deliver the necessary force to quell the crisis.

But ECB governing council member Ewald Nowotny responded: âIt is not helpful that we have an avalanche of new proposals every week.â

IMF boss Christine Lagarde met the Greek finance minister tonight as officials wrestled with how to sure up Europeâs banking system and contain the debt crisis.

Reports claimed an injection of funds into a number of continental banks was the cornerstone of a three-pronged plan being discussed to save the single currency.

The shoring up of banks under a recapitalisation scheme would allow Greece to default on its debt, while the third part of the plan is expected to cost up to £2.6trillion and involves additional firepower for the European Financial Stability Facility.

The EU and IMF have already bailed out Greece, Portugal and Ireland and officials are working to stop Italy and Spain needing similar help.